Going Into Sticker Shock at the Drugstore

WHEN Selma Sherman learned that her insurance was being canceled by her managed-care company, she didn't know how she would be able to afford the Rezulin she needs daily to treat her diabetes. After years of paying a monthly $5 co-payment for her prescription, Mrs. Sherman, an elderly resident of Levittown, suddenly faced a monthly bill of $170.

Rivoli Starr, a 75-year-old Woodmere resident, takes several medications every day, including two pills to control her blood pressure, one for cholesterol and another for acid reflux. None of her prescriptions are covered by Medicare, she said, adding, ''These medications cost a fortune. And if you need an antibiotic, forget it. I can understand why many people just stop taking their medications.''

Lillian Curcio was paying $20 for a three-month supply of Cumadin when she learned she had exceeded the $500 annual cap on her insurance plan and would no longer be covered for prescription drugs. Her cost for a three-month supply of the blood thinner immediately jumped to $45. When the elderly Elmont resident also learned she would have to pay $88.50 for a heart medication that had cost her $20, she could not afford to get her prescriptions filled.

These examples reflect a growing trend among Long Island's elderly, according to a study recently completed at the request of Representative Carolyn McCarthy, a Mineola Democrat. It was prepared by the House of Representatives Committee on Government Reform, of which Ms. McCarthy is not a member. Over several months, the study tracked the prices, in both independent and chain stores within her Fourth Congressional District in Nassau County, of five brand-name prescription drugs most commonly used by the elderly.

The five drugs investigated were Zocor, a cholesterol-cutter manufactured by Merck; Prilosec, an anti-ulcer treatment made by Astra/Merck; Procardia XL, a heart medicine made by Pfizer; Norvasc, which reduces high blood pressure and is made by Pfizer, and the anti-depressant Zoloft, also made by Pfizer.

Philip Schiliro, staff director of the House committee, said the study showed that consumers who pay for their own drugs pay more than twice as much for the five monitored medicines as do H.M.O.'s and large insurance companies.

''The price discrimination is an intolerable situation for many seniors,'' Mr. Schiliro said. ''Seniors as a group use more prescription drugs than any other population, yet they can least afford them. One-third of seniors don't have insurance, many are on fixed incomes, and they are being forced to pay more than twice as much for their prescriptions. Many have had to choose between paying for their medications and buying food.''

According to Mrs. McCarthy's office, 98 percent of her over-65 constituents are on Medicare, which until recently provided benefits that included prescription drugs and small co-payments.

But this year, many managed-care plans withdrew their Medicare programs, leaving thousands of elderly Long Islanders without insurance and forced to pay for their prescription drugs out of pocket. Other companies have annual caps of $500 to $1,000 for prescriptions, which many elderly use up within several months.

''This system is cruel to seniors,'' Mrs. Curcio said. ''I've been pretty ill and have to take several different medications. When you're not healthy, $500 for an entire year of prescriptions is nothing. Now I can't get any more medications paid for until January. Where do these companies think we seniors on fixed incomes are going to come up with the money?''

John Scanlon, a pharmacist at CVS in Syosset, said the problem among elderly customers exists not only in Mrs. McCarthy's district, but throughout the Island.

''I've seen customers in tears because they can't afford their prescriptions and don't know what to do,'' he said. ''Many are not eating so they can pay for the medications they need. I've even seen customers buy cat food to eat so that they can fill a prescription.''

The investigators, the pharmacists and the drug manufacturers disagreed over who was to blame.

Mr. Schiliro pointed a finger at the manufacturers. ''It's not the pharmacists who are making the money, but the drug companies,'' he said. ''Most pharmacies have small markups on prescription drugs, while the drug companies are engaged in discriminatory pricing that victimizes those who are least able to afford it.''

Thomas D'Angelo, owner of Franklin Square Pharmacy, said: ''We're making between 3 and 5 percent on a prescription. It's the drug manufacturers who are making the money. There is a two- tier pricing -- one for insurance companies and another for retail pharmacies. The preferred customers can buy the drugs up to 60 or 70 percent cheaper than I can. Then the uninsured elderly customers are stuck paying the higher prices, and at the same time, many local pharmacies are being driven out of business.''

A spokesman for Merck, the New Jersey-based manufacturer of one of the five drugs monitored in the study, cast doubt on its conclusions.

''While it is true that major H.M.O.'s can acquire better prices than retail pharmacies, I don't believe that the study reflects the accurate prices,'' said the spokesman, Greg Reaves. ''The real problem is not the price differentials but the lack of insurance coverage for seniors. Too many seniors don't have coverage to be able to afford their prescription drugs, and if you don't have coverage, you pay disproportionate prices for necessary medications. That's why we strongly support the reform of Medicare.''

Joel Sheriff, supervising pharmacist at Franwin Pharmacy in Mineola, said that many of his elderly customers were dropped from their prescription drug coverage with only two weeks' notice.

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''Many seniors are on multiple medications,'' he said. ''Suddenly they were going to run out of their prescriptions and had nowhere to turn. How do you tell someone in their 80's that if they don't have coverage, they'll have to lay out hundreds of dollars for their prescriptions?''

Mr. Sheriff has been offering prescriptions at his cost to customers 65 and over who lost their drug coverage.

''The offer has built customer morale and we haven't been too badly hurt by it,'' he said. ''But even at our cost, some seniors have had to make a choice of which prescriptions to take.''

After the release of the District Four study, Representative Michael Forbes of Quogue requested a similar study in District One, his Suffolk County district, Mr. Schiliro said.

''This is a three-step process,'' he said. ''First we have to quantify the problem, then raise public awareness, and finally, support legislation to correct this situation.''

Mrs. McCarthy has endorsed the Prescription Drug Fairness for Seniors Act of 1999, proposed legislation that would require drug companies to sell to pharmacies that serve Medicare beneficiaries at the same prices as those available to H.M.O.'s and large insurance companies.

''This legislation will go a long way toward making common medications available to seniors,'' Mrs. McCarthy said. ''The current prices take advantage of our community's most vulnerable members.''

The proposed legislation and the recent study have come under attack by the Pharmaceutical Research and Manufacturers of America, an industry association.

Jeff Trewhitt, a spokesman for the group, said, ''Pharmaceutical companies respond to the marketplace and managed-care companies represent three-fifths of the market. Managed-care companies are aggressive at negotiating big discounts. The beneficiaries are the people insured by these managed-care companies, while the big problem lies with the 35 percent of seniors who have no coverage and have to pay for their prescriptions out of pocket.''

Meredith Art, another representative of the association, said the study exaggerated the price differentials.

Ms. Art added that the proposed bill would guarantee lower prices only to pharmacies, but would not assure that the pharmacies would pass on the benefits to the elderly. It would extend government price controls to more than 40 percent of the market, which would discourage investment in research and development, she said.

''Price controls and better medicine don't go together,'' Ms. Art said. ''The bill does nothing to address the real problem, that the Medicare program needs to be improved.''

But Mr. Scanlon of Syosset CVS said, ''Something has to be done. I'm nervous about my own future. As we get older, we need more medications, and I worry about what will happen to me when I retire.''

Correction: October 3, 1999, Sunday An article on Aug. 15 about an investigation of pharmaceutical prices on Long Island misstated the role of Medicare, the Federal program for the elderly. It has never provided prescription drugs or co-payments for pharmaceuticals.